Public Housing for the Dead
The HUD Inspector General’s Office released an audit earlier this week on the department’s progress in making sure local public housing agencies aren’t subsidizing the deceased. According to the report, local “agencies made an estimated $15.2 million in payments on behalf of deceased tenants that they should have identified and corrected.”
The audit found the following “significant weaknesses:”
- HUD and local agencies did not have effective policies related to deceased tenants.
- Local agencies did not provide accurate and reliable information to HUD.
- HUD and local agencies did not safeguard assets to ensure correct assistance payments.
This report is a small illustration of the fundamental problems with the federal government subsidizing local governments. The local public housing agencies are supposed to be monitoring how money is spent and reporting to HUD. HUD is supposed to be monitoring the local public housing agencies. But no one does a very good monitoring job, despite the piles of regulations and paperwork that every level of government has to deal with for such subsidies. The muddled web of responsibilities also makes it easy for fraud artists to take advantage.
Last week, HUD’s IG reported that the department is sending $220 million in stimulus funds to local agencies already known to misspend taxpayer dollars.
The government is sending millions of dollars in stimulus aid to communities and housing agencies that federal watchdogs have concluded are unable to spend it appropriately, increasing the risk that the money will be wasted.
Since July, auditors working for the Department of Housing and Urban Development’s inspector general have scrutinized at least 22 cities, counties and housing authorities in 15 states and Puerto Rico to measure whether they can handle stimulus funds effectively. Only six, they found, could do so.
The rest — in line to receive more than $220 million in stimulus aid — had shortcomings ranging from poor management to inadequate staffing that threatened their ability to spend the money quickly and appropriately, a series of audit reports show.
According to a HUD spokesperson, the department is “spending millions of dollars to help local officials spend stimulus money effectively.” Maybe that’s true, but all monitoring help is a pure loss to taxpayers and the private sector economy.
Even when the federal oversight does find problems, the money often keeps flowing anyway. As the article notes:
USA TODAY reported in April that HUD planned to send $300 million in stimulus money to public housing authorities that had been repeatedly faulted by outside auditors for mishandling other forms of federal aid. Congress gave the Obama administration permission to withhold stimulus money from some of those agencies, but HUD opted earlier this year not to do so.
For more on fraud and abuse in federal programs, including housing subsidies, see this essay.
Who Reads the Readers?
This is a reminder, citizen: Only cranks worry about vastly increased governmental power to gather transactional data about Americans’ online behavior. Why, just last week, Rep. Lamar Smith (R-TX) informed us that there has not been any “demonstrated or recent abuse” of such authority by means of National Security Letters, which permit the FBI to obtain many telecommunications records without court order. I mean, the last Inspector General report finding widespread and systemic abuse of those came out, like, over a year ago! And as defenders of expanded NSL powers often remind us, similar records can often be obtained by grand jury subpoena.
Subpoenas like, for instance, the one issued last year seeking the complete traffic logs of the left-wing site Indymedia for a particular day. According to tech journo Declan McCullah:
It instructed [System administrator Kristina] Clair to “include IP addresses, times, and any other identifying information,” including e-mail addresses, physical addresses, registered accounts, and Indymedia readers’ Social Security Numbers, bank account numbers, credit card numbers, and so on.
The sweeping request came with a gag order prohibiting Clair from talking about it. (As a constitutional matter, courts have found that recipients of such orders must at least be allowed to discuss them with attorneys in order to seek advise about their legality, but the subpoena contained no notice of that fact.) Justice Department officials tell McCullagh that the request was never reviewed directly by the Attorney General, as is normally required when information is sought from a press organization. Clair did tell attorneys at the Electronic Frontier Foundation, and when they wrote to U.S. Attorney Timothy Morrison questioning the propriety of the request, it was promptly withdrawn. EFF’s Kevin Bankston explains the legal problems with the subpoena at length.
Perhaps ironically, the targeting of Indymedia, which is about as far left as news sites get, may finally hep the populist right to the perils of the burgeoning surveillance state. It seems to have piqued Glenn Beck’s interest, and McCullagh went on Lou Dobbs’ show to talk about the story. Thus far, the approved conservative position appears to have been that Barack Obama is some kind of ruthless Stalinist with a secret plan to turn the United States into a massive gulag—but under no circumstances should there be any additional checks on his administration’s domestic spying powers. This always struck me as both incoherent and a tragic waste of paranoia. Now that we’ve had a rather public reminder that such powers can be used to compile databases of people with politically unorthodox browsing habits, perhaps Beck—who seems to be something of an amateur historian—will take some time to delve into the story of COINTELPRO and other related projects our intelligence community busied itself with before we established an architecture of surveillance oversight in the late ’70s.
You know, the one we’ve spent the past eight years dismantling.
Filed under: General; Law and Civil Liberties; Telecom, Internet & Information Policy
Some Thoughts on the New Surveillance
Last night I spoke at “The Little Idea,” a mini-lecture series launched in New York by Ari Melber of The Nation and now starting up here in D.C., on the incredibly civilized premise that, instead of some interminable panel that culminates in a series of audience monologues-disguised-as-questions, it’s much more appealing to have a speaker give a ten-minute spiel, sort of as a prompt for discussion, and then chat with the crowd over drinks.
I’d sketched out a rather longer version of my remarks in advance just to make sure I had my main ideas clear, and so I’ll post them here, as a sort of preview of a rather longer and more formal paper on 21st century surveillance and privacy that I’m working on. Since ten-minute talks don’t accommodate footnotes very well, I should note that I’m drawing for a lot of these ideas on the excellent work of legal scholars Lawrence Lessig and Daniel Solove (relevant papers at the links). Anyway, the expanded version of my talk after the jump:
Regulation and Competition among Mortgage Brokers
With the House Financial Services Committee moving forward with a bill to increase the regulation of our consumer credit markets, particularly our mortgage market, it is worth asking the question: what’s the best protection for consumers, regulation or competition?
Let’s take the example of mortgage brokers. They’ve often been targeted as one of the causes of the crisis. The story goes that they just made the loans and passed it along to the lenders and/or Wall Street and so, didn’t care about the quality of the loan.
The response of government, first at the state then the federal level, has been to subject mortgage brokers to increased oversight and licensing, with the intent to keep the “bad actors” out of the marketplace. How well did this all work out?
According to Professor Morris Kleiner and Minn Fed Economist Richard Todd, not exactly the way you’d want. What the economists found was that tighter regulation on who can become a mortgage broker is actually associated ”with higher broker earnings, fewer brokers, fewer subprime mortgages, higher foreclosure rates, and a greater percentage of high-interest-rate mortgages.”
It seems the barrier to entry created by these licensing requirements reduced competition in a manner that caused far more harm to consumer than any protections provided by increasing the “quality” of mortgage brokers.
A Chance to Fix the PATRIOT Act?
As Tim Lynch noted earlier this week, Barack Obama’s justice department has come out in favor of renewing three controversial PATRIOT Act provisions—on face another in a train of disappointments for anyone who’d hoped some of those broad executive branch surveillance powers might depart with the Bush administration.
But there is a potential silver lining: In the letter to Sen. Patrick Leahy (D-VT) making the case for renewal, the Justice Department also declares its openness to “modifications” of those provisions designed to provide checks and balances, provided they don’t undermine investigations. While the popular press has always framed the fight as being “supporters” and “opponents” of the PATRIOT Act, the problem with many of the law’s provisions is not that the powers they grant are inherently awful, but that they lack necessary constraints and oversight mechanisms.
Consider the much-contested “roving wiretap” provision allowing warrants under the Foreign Intelligence Surveillance Act to cover all the communications devices a target might use without specifying the facilities to be monitored in advance—at least in cases where there are specific facts supporting the belief that a target is likely to take measures to thwart traditional surveillance. The objection to this provision is not that intelligence officers should never be allowed to obtain roving warrants, which also exist in the law governing ordinary law enforcement wiretaps. The issue is that FISA is fairly loosey-goosey about the specification of “targets”—they can be described rather than identified. That flexibility may make some sense in the foreign intel context, but when you combine it with similar flexibility in the specification of the facility to be monitored, you get something that looks a heck of a lot like a general warrant. It’s one thing to say “we have evidence this particular phone line and e-mail account are being used by terrorists, though we don’t know who they are” or “we have evidence this person is a terrorist, but he keeps changing phones.” It’s another—and should not be possible—to mock traditional particularity requirements by obtaining a warrant to tap someone on some line, to be determined. FISA warrants should “rove” over persons or facilities, but never both.
Filed under: Foreign Policy and National Security; Law and Civil Liberties
Czar of All the Americans
Anger about Obama’s many “czars” is rising, reports the Washington Post:
On paper, they are special advisers, chairmen of White House boards, special envoys and Cabinet agency deputies, asked by the president to guide high-priority initiatives. But critics call them “czars” whose powers are not subject to congressional oversight, and their increasing numbers have become a flash point for conservative anger at President Obama.
Critics of the proliferation of czars say the White House uses the appointments to circumvent the normal vetting process required for Senate confirmation and to avoid congressional oversight.
I have tended not to take concern over “czars” very seriously. After all, advisers to the president can’t exercise any power that the president doesn’t have (or assume without response from Congress or the courts). And I figured the White House doesn’t call people “czars,” that’s just a media term, so it’s not really fair to blame the White House for what reporters say.
But then, thanks to crack Cato intern Miles Pope, I discovered that the White House does call its czars czars, at least informally. A few examples:
In an interview on April 15, 2009 Obama said, “The goal of the border czar is to help coordinate all the various agencies that fall under the Department of Homeland Security…”
In a March 11, 2009, briefing, press secretary Robert Gibbs turned to “address the czar question for a minute, because I think I’ve been asked in this room any number of times if the czars in our White House to deal with energy and health care had too much power.”
On March 11, 2009 Vice President Biden said, “Today I’m pleased to announce that President Obama has nominated as Director of the Office of National Drug Control Policy — our nation’s drug czar — Gil Kerlikowske…”
More examples here.
So they do like czar imagery. So have at them, critics.
And while I said that the advisers have no real power, there’s at least one who does — a real czar — the “pay czar,” Kenneth Feinberg. He “has sole discretion to set compensation for the top 25 employees” of large companies receiving bailouts, and his “decisions won’t be subject to appeal.” Now that’s a czar.
Filed under: Government and Politics; Political Philosophy
The Legacy of TARP: Crony Capitalism
When Treasury Secretary Hank Paul proposed the bailout of Wall Street banks last September, I objected in part because the TARP meant that government connections, not economic merit, would come to determine how capital gets allocated in the economy. That prediction now looks dead on:
As financial firms navigate a life more closely connected to government aid and oversight than ever before, they increasingly turn to Washington, closing a chasm that was previously far greater than the 228 miles separating the nation’s political and financial capitals.
In the year since the investment bank Lehman Brothers collapsed, paralyzing global markets and triggering one of the biggest government forays into the economy in U.S. history, Wall Street has looked south to forge new business strategies, hew to new federal policies and find new talent.
“In the old days, Washington was refereeing from the sideline,” said Mohamed A. el-Erian, chief executive officer of Pimco. “In the new world we’re going toward, not only is Washington refereeing from the field, but it is also in some respects a player as well. . . . And that changes the dynamics significantly.”
Read the rest of the article; it is truly frightening. We have taken a huge leap toward crony capitalism, to our peril.
Filed under: Finance, Banking & Monetary Policy; Government and Politics
Bailouts Could Hit $24 Trillion?
ABC News reports:
“The total potential federal government support could reach up to $23.7 trillion,” says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, in a new report obtained Monday by ABC News on the government’s efforts to fix the financial system.
Yes, $23.7 trillion.
“The potential financial commitment the American taxpayers could be responsible for is of a size and scope that isn’t even imaginable,” said Rep. Darrell Issa, R-Calif., ranking member on the House Oversight and Government Reform Committee. “If you spent a million dollars a day going back to the birth of Christ, that wouldn’t even come close to just $1 trillion — $23.7 trillion is a staggering figure.”
Granted, Barofsky is not saying that the government will definitely spend that much money. He is saying that potentially, it could.
At present, the government has about 50 different programs to fight the current recession, including programs to bail out ailing banks and automakers, boost lending and beat back the housing crisis.
We used to complain that George W. Bush had increased spending by ONE TRILLION DOLLARS in seven years. Who could have even imagined new government commitments of $24 trillion in mere months? These promises could make the implosion of Fannie Mae and Freddie Mac look like a lemonade stand closing.
Filed under: Finance, Banking & Monetary Policy; Tax and Budget Policy
Is an Independent Fed Better?
Rep. Ron Paul now has a majority of the House of Representatives supporting his bill for an independent audit of the Federal Reserve System. He presented his case at a Cato Policy Forum recently, with vigorous responses from Bert Ely and Gilbert Schwartz.
Now more than 200 economists have signed a petition calling on Congress to “defend the independence of the Federal Reserve System as a foundation of U.S. economic stability.” The petition seems implicitly a rebuttal to Paul’s bill.
Allan Meltzer, a leading monetary scholar and frequent participant in Cato’s annual monetary conferences, declined to sign the petition and explained why: “I wrote them back and said, ‘the Fed has rarely been independent and it strikes me that being independent is very unlikely’” in the current environment.
Cato senior fellow Gerald O’Driscoll adds:
it is not the critics of the Fed who threaten its independence, but the Fed’s own actions. Its intervention in the economy is unprecedented in size and scope. It is inevitable that those actions would lead to calls for further Congressional oversight and control.
One of the lessons here is that once you create powerful government agencies, from tax-funded schools to central banks, there are no perfect libertarian rules for how they should be run. The way to protect freedom is to let people make their own decisions in civil society. Schools have to decide what to teach, offending the values of some parents and taxpayers. The Fed can be independent and unaccountable and undemocratic, or it can be subject to the political whims of elected officials; neither is a very attractive prospect.
Transparency: Good News / Bad News
Last week was an interesting week for transparency, with some good news and some bad news.
On the “good” side of the ledger, the administration rolled out “Data.gov,” a growing set of data feeds provided by U.S. government agencies. These will permit the public to do direct oversight of the kind I discussed at our “Just Give Us the Data!” policy forum back in December.
My metric of whether Data.gov is a success will be when independent users and Web sites use government data to produce new and interesting information and applications. The Sunlight Foundation has a contest underway to promote just that. Get ready for really interesting, cool, direct public oversight of the government.
Also under the White House’s new “Open Government Initiative,” an Open Government Dialogue “brainstorming session” began last week. The public can submit ideas for making the government more transparent, participatory, and collaborative. This is important stuff, an outgrowth of President Obama’s open government directive, issued on his first full day in office.
That directive called for the Office of Management and Budget to require specific actions of agencies “within 120 days,” which meant the final product was due last week. And that missed deadline is where we start to slide into the “bad” on the transparency ledger.
Last week, President Obama gave an important speech on national security (which I blogged about here and here). But you couldn’t find the speech in the “Speeches” section of the Whitehouse.gov Web site. It’s buried elsewhere. That’s “basic Web site malpractice,” I told NextGov.com. And I cautioned my friends in the transparency community not to forget Government 1.0 for all the whiz-bang Gov 2.0 projects flashing before our eyes. Whitehouse.gov should be a useful, informative resource for average Americans.
The current top proposal on the “brainstorming” site referred to above is to require a 72-hour mandatory public review period on major spending bills. This is reminiscent of President Obama’s promise to hold bills five days before signing them. But, as Stephen Dinan reports in the Washington Times, the president signed several more bills last week without holding them the requisite time.
The White House protests that they posted links to bills on the Thomas Web site at the Whitehouse.gov blog. But that does not give the public meaningful review of the bills in their final form, as they have come to the president from Congress. “Posting a link from WhiteHouse.gov to THOMAS of a conference report that is expected to pass doesn’t cut it,” says John Wonderlich at Sunlight.
President Obama signed nine new laws since we last reviewed his record on the “Sunlight Before Signing” promise. Alas, it’s been a case study in pulling defeat from the jaws of victory.
Five of the bills were held by the White House more than five days before the president signed them, but they weren’t posted! Simply posting them on Whitehouse.gov in final form would have satisfied “Sunlight Before Signing.”
President Obama’s average drops to .043, and that’s crediting him one win for the DTV Delay Act, which was posted at Whitehouse.gov in its final form for five days after Congress passed it, but before presentment, which is the logical time to start the five-day clock.
Here is the latest tally of bills passed by Congress, including the date presented, date signed, whether they’ve been posted or linked to at Whitehouse.gov, and whether they’ve been posted for the full five days after presentment. (Corrections welcome – there is no uniform way that the White House is posting bills or links, so I may have missed something.)
DoJ Fails to Report Electronic Surveillance Activities
Unlike with wiretaps, law enforcement agents are not required by federal statutes to obtain search warrants before employing pen registers or trap and trace devices. These devices record non-content information regarding telephone calls and Internet communications. (Of course, “non-content information” has quite a bit of content – who is talking to whom, how often, and for how long.)
The Electronic Privacy Information Center points out in a letter to Senate Judiciary Committee Chairman Patrick Leahy (D-VT) that the Department of Justice has consistently failed to report on the use of pen registers and trap and trace devices as required by law:
The Electronic Communications Privacy Act requires the Attorney General to “annually report to Congress on the number of pen register orders and orders for trap and trace devices applied for by law enforcement agencies of the Department of Justice.” However, between 1999 and 2003, the Department of Justice failed to comply with this requirement. Instead, 1999-2003 data was provided to Congress in a single “document dump,” which submitted five years of reports in November 2004. In addition, when the 1999-2003 reports were finally provided to Congress, the documents failed to include all of the information that the Pen Register Act requires to be shared with lawmakers. The documents do not detail the offenses for which the pen register and trap and trace orders were obtained, as required by 18 U.S.C. § 3126(2). Furthermore, the documents do not identify the district or branch office of the agencies that submitted the pen register requests, information required by 18 U.S.C. § 3126(8).
EPIC has found no evidence that the Department of Justice provided annual pen register reports to Congress for 2004, 2005, 2006, 2007, or 2008. “This failure would demonstrate ongoing, repeated breaches of the DOJ’s statutory obligations to inform the public and the Congress about the use of electronic surveillance authority,” they say.
It’s a good bet, when government powers are used without oversight, that they will be abused. Kudos to EPIC for pressing this issue. Senator Leahy’s Judiciary Committee should ensure that DoJ completes reporting on past years and that it reports regularly, in full, from here forward.
Filed under: Law and Civil Liberties; Telecom, Internet & Information Policy
Transparency for Thee but Not for Me
It appears that the Obama administration is high on transparency for everyone but its own allies. There are a lot of good reasons to reduce federal regulation, but if the Labor Department is going to push coercive unionism, it should require unions to disclose their activities and finances to their members.
Not in today’s world, however. The Obama administration is moving backwards. Reports the Washington Times:
The Obama administration, which has boasted about its efforts to make government more transparent, is rolling back rules requiring labor unions and their leaders to report information about their finances and compensation.
The Labor Department noted in a recent disclosure that “it would not be a good use of resources” to bring enforcement actions against union officials who do not comply with conflict of interest reporting rules passed in 2007. Instead, union officials will now be allowed to file older, less detailed conflict reports.
The regulation, known as the LM-30 rule, was at the heart of a lawsuit that the AFL-CIO filed against the department last year. One of the union attorneys in the case, Deborah Greenfield, is now a high-ranking deputy at Labor, who also worked on the Obama transition team on labor issues.
The only people served by this move are union officials who want less oversight over their use of dues payments, much collected from unwilling workers. The new policy certainly runs counter to the president’s promise to set a new tone in Washington.
Waste, Fraud, and Stimulus
At Capitol News Connection, brought to you each morning by your tax dollars, they reported this morning:
With more than a trillion tax dollars tied up in the Troubled Asset Relief Program and stimulus spending, Congress is trying to figure out how to account for every penny.
Uh-huh. Congress is always on top of our federal dollars.
Coincidentally, just hours after the CNC report, the Government Accountability Office released a report warning about the lack of oversight procedures in the kitchen-sink stimulus bill. And a few days earlier the inspector general for the TARP program reported that Treasury has no real details on how TARP funds are being spent. In fact, IG Neil Barofsky told Congress that there were 20 criminal investigations into possible TARP fraud already underway.
Two months ago Barofsky and the comptroller general had warned of the likelihood of waste in huge new government programs:
Neil Barofsky, the special inspector general for the $700 billion Troubled Asset Relief Program, told a House subcommittee that the government’s experiences in the reconstruction of Iraq, hurricane-relief programs and the 1990s savings-and-loan bailout suggest the rescue program could be ripe for fraud…
Gene Dodaro, acting comptroller general of the U.S., told the subcommittee that a reliance on contractors and a lack of written policies could “increase the risk of wasted government dollars without adequate oversight of contractor performance.”
The Beginnings of Earmark Transparency
Under reforms announced in March, House members have to publicly declare the earmarks they’re requesting from the Appropriations Committee. Most of the requests have now been published and WashingtonWatch.com has assembled a state-by-state catalogue of links to Members’ earmark requests.
Getting earmark requests published is progress. Getting them published in uniform, machine-readable formats would allow the public to do really thorough oversight of all the projects that Members of Congress think federal taxpayer dollars should go to.
In December, we had a policy forum called “Just Give Us the Data!” where we explored some of the current issues in government transparency.
Filed under: Government and Politics; Tax and Budget Policy; Telecom, Internet & Information Policy
So Much for the Promise of Financial Transparency
President Barack Obama promised transparency and accountability for how the federal government spends the trillions — or is it quadrillions (I’ve lost count)? — in bail-out money, stimulus outlays, and expanded government programs. Alas, his administration doesn’t seem interested in living up to his promises.
The watchdog for the Troubled Asset Relief Program, the government’s financial rescue plan, said today that the Treasury Department has not been cooperating with oversight efforts up to this point.
“We do not seem to be a priority for the Treasury Department,” the Congressional Oversight Panel’s Elizabeth Warren told a Senate Finance Committee hearing today.
“We have sent letters. We have requested that there be someone named so that we can get technical information. And so far, we have not been a first priority,” Warren said. “We use what you give us, and we will exercise the leverage given to us by Congress. In part, that’s why I’m here today. I’m here to talk to you about what’s happened so far, what we have discovered so far, the inquiries that we have in mid-stream and for which we continue to await responses.”
Warren, visibly frustrated with a lack of cooperation from the administration, emphasized, “This problem starts with Treasury.”
Obviously, this isn’t the first time that a presidential commitment has gone aglimmering. But given the extraordinary opportunity for pervasive waste, fraud, and abuse in the tsunami of new federal spending, few presidential commitments have been as important.
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